Now, finally, Cliffs is out spending its seed corn. The question is, will it get returns from it? What has protected Cliffs in the past from takeover is its horribly structured off-take contracts. Why would Mittal, for example, want to buy out someone who gives it cheap ore already? That protection will have less value as the iron ore business becomes a smaller part of the whole, so the question I ask is, is this a clean up to get taken out by the Russians, or maybe Xstrata? At some point, the combination represents a real chance for someone to get a nice slice of two business groups that represent value.
Xstrata and Anglo both have to grow or else be eaten, maybe some North American iron ore and coal is what’s for dinner?
Benjamin
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